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What I’ve Got: Powerful Advertising 

I don’t know how many of you listen to Plant Money, I’m kind of obsessed. A few months ago there was a story about Coca-Cola that was really fascinating. It wasn’t one of those “the real recipe revealed” stories – it was about how the power of advertising saved the company. You should listen to the podcast, but I’ll give you a quick overview. Ever wonder why (and how) Coca-Cola was only 5 cents for 70 years? It turns out that the company was forced to keep their prices down because of a careless negotiation. In 1899 Coke was served only at Soda Fountains. So, when two lawyers proposed the idea of bottling the product the president of Coca-Cola dismissed the idea. He impulsively made a deal to sell them syrup at a fixed price forever. Crazy, right? Obviously the bottles were a huge hit. The company knew that they were about to face major losses if corner stores starting raising the prices of individual bottles of Coke. The only way that they could stay afloat was to ensure that the price of a bottle of Coke would not rise. They achieved this through a massive advertising campaign — conditioning the nation to think that Coke had to always be 5 cents. In the end things clearly worked out very well for Coke – it’s no longer 5 cents, but it is still the first cola on every American’s mind. 

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